Headline

 



Selangor freezes approval of new service apartments, SoHos and SoVos for 6 months

Under the latest ruling, development projects that have been approved before 1 January 2016 will not be affected. Under the latest ruling, development projects that have been approved before 1 January 2016 will not be affected.

The Selangor government has frozen the approval of new property projects involving service apartments, small office home offices (SoHos) and small office versatile offices (SoVos) for six months amid the gloomy outlook plaguing the sector.

The Real Estate and Housing Developers' Association Malaysia (REHDA), in a letter dated 7 March 2016, informed its Selangor members of this development after receiving a notice from the Selangor Housing and Property Board (LPHS).

"LPHS issued a letter informing that the state has decided to freeze the approval for all applications of service apartments, SoHos and SoVos submitted after 1 January 2016 for a period of 6 months, pending the issuance of new planning guidelines for such developments," said REHDA Selangor chairman Datuk Khor Chap Jen in the letter.

When contacted by SunBiz, REHDA confirmed that the letter had been sent out to its members in Selangor. However, the association was unable to immediately respond to queries raised as it will only hold a meeting tomorrow to discuss the issue.

Freezing of property development projects is not new in Malaysia. The Johor government in December 2014 rejected applications for serviced apartments due to oversupply. A few SoHo projects in Penang were frozen due to their unclear status – whether they were commercial or residential properties.

Property experts lauded the Selangor government's move to halt such developments in view of the current challenging times in the property sector.

Malaysian Institute of Estate Agents (MIEA) immediate past president Siva Shanker even opined that the state government should have done this two years ago.

"In the last few years, there have been a lot of apartments and condominiums being built and sold. That sector of the market is clearly oversupplied and the market started to feel the pinch last year.

"All those units will come into the market about the same time and it is going to create a glut, especially during a market downturn, the glut will be a double whammy," he said.

Siva said the SoHo and SoVo segments are most severely affected by the oversupply and it will have the most effect during an economic downturn.

"The quantum of this segment is large enough and it has the power to drag other things down," he noted.

According to statistics compiled by the National Property Information Centre (NAPIC) Selangor had 25,811 units of serviced apartments yet to be sold in the third quarter of 2015, with an incoming supply of 32,866 units. Figures for SoHos and SoVos were not immediately available.

UPDATE: Selangor had 4,302 units of service apartment yet to be sold in the fourth quarter of 2015, with an incoming supply of 33,647 units. As for SoHo, Selangor had 2,731 units unsold with an incoming supply of 9,623 units in 4Q15. Planned supply (projects with building plan approval but yet to be constructed) for serviced apartment and SoHo stood at 7,692 units and 3,446 units respectively.

A property analyst who declined to be quoted, however, said the ban should not be applied across the board as the supply and demand dynamic won't be the same for different areas.

"Normally SoHos, SoVos and service apartments attract more investors, that could be one of the reasons for the state government to impose such a measure. But certain segments of service apartments are really needed. If you constrain the supply further, when the demand returns, you'll push prices up," he said.

Meanwhile, Siva pointed out that most of the service apartments in the country are not up to industry standard.

"Many of these units have been sold and marketed as serviced apartments because of the commercial title. Many of them don't really have service. Serviced apartments are equivalent to hotels, you should have services like a lobby, concierge and room service," he said.

 

News Source: SunBiz, The Sun Daily, 11 March 2016

Rate this item
(3 votes)

6 comments

  • Josephciz
    Josephciz Tuesday, 15 August 2017 08:44 Comment Link

    online casino new jersey sites
    online slots
    play vegas style blackjack online
    online slots
    online casino usa iphone

    Report
  • RobertNib
    RobertNib Monday, 14 August 2017 11:59 Comment Link

    online casino for mac download
    roulette
    us online gambling 2014
    online roulette
    super slots on line casino

    Report
  • ThomasDar
    ThomasDar Saturday, 12 August 2017 20:26 Comment Link

    legit online casinos canada
    no zero online roulette
    live dealer casino us players
    live roulette online iphone
    video game slots

    Report
  • MartinMax
    MartinMax Friday, 11 August 2017 22:23 Comment Link

    viagra generico nao funciona
    Viagra Coupons
    pillola rossa viagra femminile
    viagra coupons 2017
    sildenafil citrate 100mg uk

    Report
  • Careycleap
    Careycleap Thursday, 10 August 2017 12:59 Comment Link

    legitimate us online casino
    casino slot online games
    real online slots for money
    iphone slot machine app real money
    grand virtual casino software

    Report
  • KelClaige
    KelClaige Saturday, 24 June 2017 21:42 Comment Link

    Non Persription Drugs For Ed buy viagra Viagra Overnight Delivery

    Report

Leave a comment

Make sure you enter all the required information, indicated by an asterisk (*). HTML code is not allowed.

xxxlogo

At PTLM, everything we do is with integrity, commitment and innovation as to facilitate information dissemination so that you could make well-informed decision.

 

Subscribe With Us


Invalid Input

Most Popular

Recent News

Our Gallery